- The Washington Times - Saturday, December 2, 2000

Corvis Corp. has a product that Internet or cell phone users want and sometimes need, but a stock that few investors crave.

The stock of the Columbia, Md. optical network provider is wallowing in the trough of Wall Street's technology downturn, analysts say.

Yet some predict it will float up soon, mostly because of the utility of Corvis' product, which helps send data faster and farther using a network of light waves.

"All stocks, the big caps, the micro caps are all going to be hit here as investors run scared," said Ulric Weil, technology strategist at Friedman, Billings, Ramsey Inc. in Arlington.

Corvis stock closed Friday at $32.31. It has been selling for less than $30 for several weeks, hitting its 52-week low Nov. 22 at $25.12 per share.

The irony is that Corvis made one of the most successful initial public offerings in history, according to analysts. It's shares began trading at $36 per share on July 28 this year and jumped to nearly $85 by the end of the day. By August, the stock hit its 52-week high of $114.75.

Mr. Weil said Corvis has a useful product, and has even attracted a number of technology heavy hitters like Internet applications and service provider, Qwest Communications in Denver. But, investors are looking ahead and seeing slower national growth plus continuing disinterest in technology sector offerings.

"Investors are still running away. They (investors) have to admit that demand is slowing," he added.

Although Corvis stock has declined steadily since August, B. Alexander Henderson, of Salomon Smith Barney in New York, believes the stock is a good buy.

In fact, all 11 analysts covering the company think the company is in good shape and suggest buying shares, Bloomberg News Service reports.

Mr. Henderson gives the stock a target price of $115. In his most recent research report, he said potential contracts and partnerships, solid earnings and more acquisitions in the new year should drive the stock price higher.

"We must admit that initially we came at Corvis with a high degree of skepticism," he said. "Yet, over time, we are more inclined to believe in the Corvis vision today."

The company's goal is simply to continue acquiring other companies, gather clients and make a name for itself on Wall Street.

Internet service companies, Qwest Communications, Broadwing Communications in Cincinnati and Williams Communications in Tulsa, Okla., have already agreed to use the Corvis networks, collectively bringing the company $550 million in contracts.

"The field trial acceptance and related commercial revenue are evidence that customers desire an all-optical network and that Corvis will be a major player in delivering the most advanced all-optical communications solutions available today," said Dr. David Huber, Corvis' chairman and chief executive.

That said, Corvis' net losses rose this quarter to $66.4 million (29 cents per share) from $16.1 million (56 cents) in the like quarter last year.

Mr. Huber blames the losses on two acquisitions Corvis made this year. The company bought Alegety Telecom, a French maker of high capacity optical transmission equipment, and Daylight Networks Inc., a Palo Alto, Calif. provider of optical network systems and subsystems.

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